Australian Foundation Investment Company (AFI)

Australia’s largest listed investment company is trading at a near 7 per cent discount to its net assets, marginally better than the sector average discount of nearly 8 per cent. Like many listed fund managers, there are no clear catalysts on the horizon for a return of investor confidence and corresponding jump in its share price. On the upside,
Australian Foundation Investment Company
’s net asset backing of $4.64 per share was at its highest level in 10 months during April. Management recently told investors that many Australian companies faced subdued earnings expectations in the coming period. However, AFIC remains focused on companies with strong recurring cash flows and strong balance sheets, with its largest holdings reflective of the S&P/ASX 200 – major banks, miners, energy and infrastructure companies. AFIC’s profit for the half-year to December was down 7 per cent to $113.7 million.